Heartland Financial USA, Inc. Reports Third Quarter 2012 Results

Heartland Financial USA, Inc. (NASDAQ: HTLF):

Quarterly Highlights
  • Net income of $13.6 million or $0.75 per diluted common share
  • Net interest margin of 3.84%
  • Provision for loan and lease losses decreased $3.5 million over the second quarter 2012
  • Gains on sale of loans increased $1.1 million or 8% over record second quarter 2012
  • Deposit growth of $168.1 million since June 30, 2012
  • Nonperforming assets decreased $6.4 million since June 30, 2012
  • Acquisition of three banking offices from Liberty Bank, FSB completed on July 13, 2012
  • Merger agreement with First Shares, Inc. announced on August 2, 2012
  • Stock purchase agreement with Heritage Bank, N.A. announced on October 11, 2012
   

 Quarter Ended 
    Nine Months Ended
September 30, September 30,
 
2012     2011 2012     2011
Net income (in millions) $ 13.6 $ 7.4 $ 40.4 $ 21.8
Net income available to common stockholders (in millions) 12.6 3.4 37.4 15.2
Diluted earnings per common share 0.75 0.20 2.24 0.92
 
Return on average assets 1.11 % 0.33 % 1.14 % 0.50 %
Return on average common equity 16.79 4.97 17.44 7.77
Net interest margin 3.84 4.14 4.03 4.18
 
“Heartland continued its streak of excellent quarterly earnings reports today, nearly doubling earnings from last year's third quarter, and reporting the second best quarterly earnings in our 31-year history.”

 

Lynn B. Fuller, chairman, president and chief executive officer, Heartland Financial USA, Inc.
 

Heartland Financial USA, Inc. (NASDAQ: HTLF) today reported net income of $13.6 million for the quarter ended September 30, 2012, an increase of $6.2 million or 85 percent from the $7.4 million recorded for the third quarter of 2011. Net income available to common stockholders was $12.6 million, or $0.75 per diluted common share, for the quarter ended September 30, 2012, compared to $3.4 million, or $0.20 per diluted common share, for the third quarter of 2011. Return on average common equity was 16.79 percent and return on average assets was 1.11 percent for the third quarter of 2012, compared to 4.97 percent and 0.33 percent, respectively, for the same quarter in 2011.

Net income recorded for the first nine months of 2012 was $40.4 million, compared to $21.8 million recorded during the first nine months of 2011. Net income available to common stockholders was $37.4 million, or $2.24 per diluted common share, for the nine months ended September 30, 2012, compared to $15.2 million, or $0.92 per diluted common share, earned during the first nine months of 2011. Return on average common equity was 17.44 percent and return on average assets was 1.14 percent for the first nine months of 2012, compared to 7.77 percent and 0.50 percent, respectively, for the same period in 2011.

Earnings for both the third quarter and first nine months of 2012, in comparison to the same periods in 2011, were most significantly affected by the continued expansion of mortgage operations in both new and existing markets, coupled with increased net interest income, reductions in provision for loan and lease losses and increased securities gains. The effect of these improvements was partially offset by increases in salaries and employee benefits, professional fees, net losses on repossessed assets and other noninterest expenses.

On July 13, 2012, Heartland completed the purchase of three retail banking offices from Liberty Bank, FSB in its Dubuque, Iowa market. The purchase was completed through Dubuque Bank and Trust Company. It included loans of $9.6 million and deposits of $53.4 million.

Commenting on Heartland's third quarter results, Lynn B. Fuller, Heartland's chairman, president and chief executive officer said, “Heartland continued its streak of excellent quarterly earnings reports today, nearly doubling earnings from last year's third quarter, and reporting the second best quarterly earnings in our 31-year history.”

Net Interest Margin Dips Below 4.00 Percent; Increases in Dollars

Net interest margin, expressed as a percentage of average earning assets, was 3.84 percent during the third quarter of 2012 compared to 4.05 percent for the second quarter of 2012 and 4.14 percent for the third quarter of 2011. For the nine-month periods ended September 30, net interest margin was 4.03 percent during 2012 and 4.18 percent during 2011. These declines are a result of the sustained low interest rate environment where yields on the securities and loan portfolios are declining at a greater pace than rates paid on deposits and other borrowings.

Fuller said, “As we had expected, Heartland's net interest margin slipped below 4 percent in the quarter to 3.84 percent. Though our margin reflected the realities of this low-rate environment, net interest income in dollars remained solid, increasing over last year's quarter and year-to-date periods.”

On a tax-equivalent basis, interest income in the third quarter of 2012 was $48.5 million compared to $49.1 million in the third quarter of 2011, a decrease of $629,000 or 1 percent. For the first nine months of 2012, interest income on a tax-equivalent basis was $147.2 million compared to $148.4 million during the same period in 2011, a decrease of $1.2 million or 1 percent. Even though average earning assets increased $395.0 million or 11 percent during the third quarter of 2012 compared to the third quarter of 2011 and $284.7 million or 8 percent during the first nine months of 2012 compared to the same period in 2011, this growth did not cover the decline in interest income due to a decrease in the rates earned on these assets. The average interest rate earned on these assets was 4.80 percent during the third quarter of 2012 compared to 5.38 percent during the third quarter of 2011. For the first nine months of the year, the average interest rate earned on these assets was 5.05 percent during 2012 compared to 5.50 percent during 2011. The most significant contributor to these declines was the overall yield earned on the securities portfolio, which decreased 89 basis points during the quarter ended September 30, 2012, compared to the same quarter in 2011 and 72 basis points during the nine months ended September 30, 2012, compared to the same nine months in 2011.

Interest expense for the third quarter of 2012 was $9.7 million, a decrease of $1.6 million or 14 percent from $11.4 million in the third quarter of 2011. On a nine-month comparative basis, interest expense decreased $5.9 million or 17 percent. Even though average interest bearing liabilities increased $232.6 million or 8 percent for the quarter ended September 30, 2012, as compared to the same quarter in 2011, and $142.7 million or 5 percent for the nine month period ended on September 30, 2012, as compared to the same nine month period in 2011, the average interest rate paid on Heartland's deposits and borrowings declined 30 basis points during the quarterly period under comparison and 32 basis points during the nine-month period under comparison. Contributing to this improvement in interest expense was a change in the mix of deposits. Average savings balances, the lowest cost interest-bearing deposits, as a percentage of total average interest bearing deposits was 68 percent during both the third quarter and first nine month periods of 2012 compared to 65 percent for the third quarter of 2011 and 64 percent for the first nine months of 2011. Additionally, the average interest rate paid on savings deposits was 0.38 percent during the third quarter of 2012 and 0.39 percent during the first nine months of 2012 compared to 0.54 percent during the third quarter of 2011 and 0.61 percent during the first nine months of 2011.

Net interest income on a tax-equivalent basis totaled $38.8 million during the third quarter of 2012, an increase of $980,000 or 3 percent from the $37.8 million recorded during the third quarter of 2011. For the first nine months of 2012, net interest income on a tax-equivalent basis was $117.6 million, an increase of $4.8 million or 4 percent from the $112.8 million recorded during the first nine months of 2011.

Growth in Noninterest Income Outpaces Increase in Noninterest Expense

Noninterest income during the third quarter of 2012 hit a quarterly high of $29.8 million, an increase of $16.5 million or 124 percent over the $13.3 million recorded during the third quarter of 2011 and an increase of $1.5 million or 5 percent over the previous quarterly record set in the second quarter of 2012. For the nine-month period ended September 30, noninterest income was $81.4 million in 2012 compared to $40.5 million in 2011, an increase of $40.9 million or 101 percent. The categories contributing most significantly to the improvement in noninterest income during both periods were loan servicing income and gains on sale of loans. Gains on sale of loans totaled $13.8 million during the third quarter of 2012 compared to $3.2 million during the third quarter of 2011 and $12.7 million during the second quarter of 2012. For the nine-month period ended September 30, gains on sale of loans totaled $34.9 million during 2012 compared to $5.9 million during 2011. The volume of loans sold totaled $448.7 million during the third quarter of 2012, more than four times the $97.6 million sold during the third quarter of 2011. For the nine months ended September 30, the volume of loans sold totaled $1.1 billion during 2012 compared to $244.4 million during 2011. Pricing received on the sale of fixed rate residential mortgage loans into the secondary market improved through a bulk delivery method that was implemented during the second quarter of 2011, instead of an individual delivery method that had been used previously. At the same time, secondary market pricing began to be matched with origination pricing through the use of a software tool that assists in hedging the locked rate pipeline position. Other major contributors to the increase in noninterest income for the nine-month comparative period were securities gains and other noninterest income. Securities gains totaled $14.1 million during the first nine months of 2012 compared to $8.9 million during the first nine months of 2011, as volatility in the bond market continued to provide opportunities to swap securities from one sector of the portfolio to another without significantly changing the duration of the portfolio. Offsetting, in part, the securities gains was an impairment loss on securities totaling $981,000 recorded during the first quarter of 2012. Other noninterest income totaled $3.3 million during the first nine months of 2012 compared to a loss of $126,000 during the first nine months of 2011. Included in other noninterest income during the first quarter of 2012 was $2.0 million in equity earnings which resulted from the sale of two low-income housing projects within partnerships in which Dubuque Bank and Trust Company was a member.

Loan servicing income increased $1.9 million or 179 percent for the third quarter of 2012 as compared to the third quarter of 2011 and $3.9 million or 99 percent for the first nine months of 2012 compared to the first nine months of 2011. Two components of loan servicing income, mortgage servicing rights and amortization of mortgage servicing rights, are dependent upon the level of loans Heartland originates and sells into the secondary market, which in turn is highly influenced by market interest rates for home mortgage loans. Mortgage servicing rights income was $3.3 million during the third quarter of 2012 compared to $743,000 during the third quarter of 2011 and amortization of mortgage servicing rights was $1.9 million during the third quarter of 2012 compared to $1.1 million during the third quarter of 2011. Loan servicing income also includes the fees collected for the servicing of mortgage loans for others, which is dependent upon the aggregate outstanding balance of these loans, rather than quarterly production and sale of mortgage loans. Fees collected for the servicing of mortgage loans for others were $1.1 million during the third quarter of 2012 compared to $908,000 during the third quarter of 2011. The portfolio of mortgage loans serviced for others by Heartland totaled $1.96 billion at September 30, 2012, compared to $1.47 billion at September 30, 2011. Heartland believes long term success in the mortgage banking business will depend on its ability to shift toward purchase originations, which will drive revenue when the refinance boom comes to an end. For the third quarter of 2012, refinancing activity represented 64 percent of total mortgage originations compared to 58 percent during the second quarter of 2012.

The following table summarizes Heartland's residential mortgage loan activity during the most recent five quarters:
    As Of and For the Quarter Ended
(Dollars in thousands) 9/30/2012     6/30/2012     3/31/2012     12/31/2011     9/30/2011
Mortgage Servicing Fees $ 1,123 $ 1,037 $ 967 $ 932 $ 908
Mortgage Servicing Rights Income 3,316 2,614 1,986 1,380 743
Mortgage Servicing Rights Amortization (1,896 ) (1,112 ) (1,718 ) (862 ) (1,103 )
Total Residential Mortgage Loan Servicing Income $ 2,543   $ 2,539   $ 1,235   $ 1,450   $ 548  
Valuation Adjustment on Mortgage Servicing Rights $ (493 ) $ (194 ) $ 13 $ (19 ) $
Gains On Sale of Loans $ 13,750 $ 12,689 $ 8,502 $ 5,473 $ 3,183
Total Residential Mortgage Loan Applications $ 672,382 $ 638,595 $ 549,315 $ 301,551 $ 262,952
Residential Mortgage Loans Originated $ 488,658 $ 374,743 $ 293,724 $ 253,468 $ 143,317
Residential Mortgage Loans Sold $ 448,704 $ 360,743 $ 243,836 $ 208,494 $ 97,591
Residential Mortgage Loan Servicing Portfolio $ 1,963,567 $ 1,776,912 $ 1,626,129 $ 1,541,417 $ 1,467,127
 

For the third quarter of 2012, noninterest expense totaled $47.2 million, an increase of $15.3 million or 48 percent from the same quarter of 2011. For the nine-month period ended September 30, noninterest expense totaled $128.8 million in 2012 compared to $97.1 million in 2011, a $31.7 million or 33 percent increase. Contributing to these increases in noninterest expense were a $9.3 million or 53 percent increase in salaries and employee benefits for the quarter and a $23.0 million or 43 percent increase for the nine-month period, a large portion of which resulted from the expansion of residential loan origination and the addition of personnel in the Heartland Mortgage and National Residential Mortgage unit. Commission expense was $5.7 million during the third quarter of 2012 compared to $1.3 million during the third quarter of 2011. For the nine-month comparative period ended on September 30, commission expense totaled $14.0 million during 2012 and $3.3 million during 2011. The increases in commission expense are a direct result of the increased mortgage loan origination activity. Additionally, the accrual for incentive plan compensation payouts was significantly higher in 2012, in direct correlation with the higher period to date earnings and the reinstatement of incentive compensation for Heartland's executive officers after the repayment of TARP (Troubled Asset Relief Program) funds. Full-time equivalent employees totaled 1,391 on September 30, 2012, compared to 1,105 on September 30, 2011. Also contributing to the increases in noninterest expense were increased net losses on repossessed assets, resulting primarily from the revaluation on two other real estate owned properties, and increased other noninterest expenses, a large portion of which was attributable to the ramp up of our mortgage origination operations, including provisions to a reserve for the potential buyback of residential mortgage loans.

Fuller commented, “The expansion of our mortgage unit is also propelling Heartland forward. In the first nine months of 2012, we have originated $1.2 billion in mortgages and expect this number to increase as loan production teams grow in size and capabilities.”

Heartland's effective tax rate was 32.73 percent for the first nine months of 2012 compared to 28.37 percent for the first nine months of 2011. Federal low-income housing tax credits included in Heartland's effective tax rate totaled $599,000 during the first nine months of both 2012 and 2011. Heartland's effective tax rate is also affected by the level of tax-exempt interest income which, as a percentage of pre-tax income, was 16.65 percent during the first nine months of 2012 compared to 25.87 percent during the first nine months of 2011. The tax-equivalent adjustment for this tax-exempt interest income was $5.4 million during the first nine months of 2012 compared to $4.2 million during the first nine months of 2011.

Sustained, But Slower Net Loan Growth; Strong Deposit Growth

Total assets were $4.59 billion at September 30, 2012, an increase of $288.1 million since December 31, 2011, with $165.5 million of this growth occurring in the third quarter and $114.8 million in the second quarter. Included in the asset growth for the third quarter of 2012 were the $53.5 million in assets acquired from Liberty Bank, FSB. Securities represented 29 percent of total assets at September 30, 2012, compared to 31 percent at year-end 2011.

Total loans and leases held to maturity were $2.65 billion at September 30, 2012, compared to $2.48 billion at year-end 2011, an increase of $166.7 million or 9 percent annualized, with $18.4 million occurring during the third quarter and $97.2 million during the second quarter. Included in the loan growth for the third quarter of 2012 were the $9.6 million in loans acquired from Liberty Bank, FSB. Commercial and commercial real estate loans, which totaled $1.90 billion at September 30, 2012, increased $92.9 million or 7 percent annualized since year-end 2011, with a decrease of $1.6 million during the third quarter and $61.4 million in growth occurring in the second quarter. Two larger relationships with outstanding balances totaling $10.8 million were paid off this quarter when the businesses were sold. Additionally, payoffs totaling $9.6 million were received on a few credits as part of exit strategies related to the increased credit risk identified in these relationships. Excluding these nonrecurring events, loan production continues its positive trend over the past several quarters. Residential mortgage loans, which totaled $229.0 million at September 30, 2012, increased $34.5 million or 24 percent annualized since year-end 2011, with $8.9 million of this growth occurring during the third quarter and $17.2 million in the second quarter. Agricultural and agricultural real estate loans, which totaled $283.7 million at September 30, 2012, increased $20.7 million or 11 percent annualized since year-end 2011, with $4.4 million of this growth occurring in the third quarter and $8.6 million in the second quarter. Consumer loans, which totaled $236.6 million at September 30, 2012, increased $16.5 million or 10 percent annualized since year-end 2011, with $6.0 million of the growth occurring during the third quarter and $8.2 million during the second quarter.

Fuller stated, “An important contributor to Heartland's exceptional performance thus far this year is solid loan growth, which continued in the third quarter. Our growth strategy emphasizes proactive business development, calling on potential new commercial, agri-business and small business clients. It's also worth noting that we have nearly achieved our lending goal of approximately $92 million with respect to the US Treasury's Small Business Lending Fund.”

Total deposits were $3.50 billion at September 30, 2012, compared to $3.21 billion at year-end 2011, an increase of $292.9 million or 12 percent annualized, with $168.1 million of the growth occurring during the third quarter and $59.1 million during the second quarter. Included in the deposit growth for the third quarter of 2012 were the $53.4 million in deposits acquired from Liberty Bank, FSB. The composition of Heartland's deposits continues to improve as no-cost demand deposits as a percentage of total deposits was 25 percent at September 30, 2012, compared to 23 percent at year-end 2011. Demand deposits increased $140.5 million or 25 percent annualized since year-end 2011, with $78.2 million of this growth occurring during the third quarter and $28.1 million during the second quarter. Savings deposits increased $131.2 million or 10 percent annualized since December 31, 2011, with $75.6 million of this growth occurring during the third quarter and $2.8 million during the second quarter. Certificates of deposit, exclusive of brokered deposits, increased $5.4 million or 1 percent annualized since year-end 2011, with $9.2 million during the third quarter and $18.2 million during the second quarter, due primarily to additional deposits from a few public entities in the Dubuque, Iowa market. As a percentage of total deposits, certificates of deposit remained below 25 percent at September 30, 2012.

“We continue to see growth in no-cost demand and low-cost savings and money market deposits. The favorable shift in deposit mix continues with these non-time categories now representing 77 percent of total deposits,” Fuller added.

Provision for Loan Losses Continues at Lower Levels; Nonperforming Assets Decline

The allowance for loan and lease losses at September 30, 2012, was 1.53 percent of loans and leases and 99.16 percent of nonperforming loans compared to 1.48 percent of loans and leases and 64.09 percent of nonperforming loans at December 31, 2011, and 1.86 percent of loans and leases and 60.85 percent of nonperforming loans at September 30, 2011. The provision for loan losses was a negative $502,000 for the third quarter of 2012 compared to expense of $7.7 million for the third quarter of 2011, an $8.2 million or 106 percent decrease, primarily as a result of the collection in full of a loan that had an impairment reserve of $1.3 million that had been established through the provision for loan losses in a previous quarter. For the first nine months of 2012, provision for loan losses was $4.9 million compared to $21.6 million for the first nine months of 2011, a $16.7 million or 78 percent decrease. A reduction in the level of the allowance for loan and lease losses maintained for impaired loans was the primary contributor to the lower provision during the first nine months of 2012. The portion of the allowance for loan and lease losses maintained for impaired loans has decreased $7.4 million since September 30, 2011, leaving the allowance on non-impaired loans relatively stable at 1.33 percent of loans and leases at September 30, 2012, compared to 1.34 percent at September 30, 2011.

Nonperforming loans, exclusive of those covered under loss sharing agreements, were $40.7 million or 1.54 percent of total loans and leases at September 30, 2012, compared to $57.4 million or 2.31 percent of total loans and leases at December 31, 2011, and $72.6 million or 3.06 percent of total loans and leases at September 30, 2011. Approximately 44 percent, or $17.9 million, of Heartland's nonperforming loans have individual loan balances exceeding $1.0 million. These nonperforming loans, to an aggregate of 9 borrowers, are primarily concentrated in Heartland's banks serving the Western states, with $6.7 million originated by Arizona Bank & Trust, $3.4 million originated by Rocky Mountain Bank, $3.1 million originated by Wisconsin Bank & Trust (formerly known as Wisconsin Community Bank), $1.8 million originated by Galena State Bank & Trust Company, $1.5 million originated by New Mexico Bank & Trust and $1.4 million originated by Riverside Community Bank. The portion of Heartland's nonperforming loans covered by government guarantees was $650,000 at September 30, 2012. As identified using the North American Industry Classification System (NAICS), $9.9 million of nonperforming loans with individual balances exceeding $1.0 million were for lot and land development and the remaining $8.0 million was distributed among five other industry categories.

Delinquencies in each of the loan portfolios continue to be relatively stable and no significant adverse trends were identified during the third quarter of 2012. Loans delinquent 30 to 89 days were 0.53 percent of total loans at September 30, 2012, compared to 0.46 percent at June 30, 2012, 0.55 percent at March 31, 2012, 0.23 percent at December 31, 2011, and 0.54 percent at September 30, 2011.

Other real estate owned was $36.1 million at September 30, 2012, compared to $37.9 million at June 30, 2012, $38.9 million at March 31, 2012, and $44.4 million at December 31, 2011. Liquidation strategies have been identified for all the assets held in other real estate owned. Management continues to market these properties through an orderly liquidation process instead of a quick liquidation process in order to avoid discounts greater than the projected carrying costs. During 2012, $4.2 million of other real estate owned was sold during the third quarter, $5.9 million during the second quarter and $12.4 million during the first quarter.

The schedules below summarize the changes in Heartland's nonperforming assets, including those covered by loss share agreements, during the third quarter of 2012 and the first nine months of 2012:
        Other     Other     Total
Nonperforming Real Estate Repossessed Nonperforming
(Dollars in thousands) Loans Owned Assets Assets
June 30, 2012 $ 47,707 $ 37,941 $ 465 $ 86,113
Loan foreclosures (5,553 ) 5,546 7
Net loan charge offs (536 ) (536 )
New nonperforming loans 6,211 6,211
Reduction of nonperforming loans(1) (4,850 ) (4,850 )
OREO/Repossessed sales proceeds (3,941 ) (11 ) (3,952 )
OREO/Repossessed assets writedowns, net (3,407 ) (43 ) (3,450 )
Net activity at Citizens Finance Co.     78   78  
September 30, 2012 $ 42,979   $ 36,139   $ 496   $ 79,614  
 
(1) Includes principal reductions and transfers to performing status.
 
               
Other Other Total
Nonperforming Real Estate Repossessed Nonperforming
(Dollars in thousands) Loans Owned Assets Assets
December 31, 2011 $ 60,780 $ 44,387 $ 648 $ 105,815
Loan foreclosures (20,192 ) 20,108 84
Net loan charge offs (1,259 ) (1,259 )
New nonperforming loans 15,166 15,166
Reduction of nonperforming loans(1) (11,516 ) (11,516 )
OREO/Repossessed sales proceeds (22,182 ) (355 ) (22,537 )
OREO/Repossessed assets writedowns, net (6,174 ) (155 ) (6,329 )
Net activity at Citizens Finance Co.     274   274  
September 30, 2012 $ 42,979   $ 36,139   $ 496   $ 79,614  
 
(1) Includes principal reductions and transfers to performing status.
 

Net charge-offs on loans during the third quarter of 2012 were $536,000 compared to $4.1 million during the third quarter of 2011.

“Much of Heartland's success this year is the result of our steady improvement in credit quality. I'm extremely pleased to report that nonperforming loans have been reduced by nearly $32 million from last year's third quarter, a 44 percent reduction. Over the last 12 months, the percentage of non-performing loans and leases to total loans and leases has been reduced from 3.1% to 1.5%,” concluded Fuller.

Conference Call Details

Heartland will host a conference call for investors at 5:00 p.m. ET today. To participate, dial 877-407-0782 at least five minutes before start time. To listen to the live webcast, log on to www.htlf.com at least 15 minutes before start time. If you are unable to participate on the call, a replay will be available until October 28, 2013, by logging on to www.htlf.com.

About Heartland Financial USA, Inc.

Heartland Financial USA, Inc. is a $4.6 billion diversified financial services company providing banking, mortgage, wealth management, investment, insurance and consumer finance services to individuals and businesses. Heartland currently has 65 banking locations in 43 communities in Iowa, Illinois, Wisconsin, New Mexico, Arizona, Montana, Colorado and Minnesota and loan production offices in California, Nevada, Wyoming, Idaho and North Dakota. Additional information about Heartland Financial USA, Inc. is available at www.htlf.com.

Safe Harbor Statement

This release, and future oral and written statements of Heartland and its management, may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 about Heartland's financial condition, results of operations, plans, objectives, future performance and business. Although these forward-looking statements are based upon the beliefs, expectations and assumptions of Heartland's management, there are a number of factors, many of which are beyond the ability of management to control or predict, that could cause actual results to differ materially from those in its forward-looking statements. These factors, which are detailed in the risk factors included in Heartland's Annual Report on Form 10-K filed with the Securities and Exchange Commission, include, among others: (i) the strength of the local and national economy; (ii) the economic impact of past and any future terrorist threats and attacks and any acts of war, (iii) changes in state and federal laws, regulations and governmental policies concerning the Company's general business; (iv) changes in interest rates and prepayment rates of the Company's assets; (v) increased competition in the financial services sector and the inability to attract new customers; (vi) changes in technology and the ability to develop and maintain secure and reliable electronic systems; (vii) the potential impact of acquisitions, (viii) the loss of key executives or employees; (ix) changes in consumer spending; (x) unexpected results of acquisitions; (xi) unexpected outcomes of existing or new litigation involving the Company; and (xii) changes in accounting policies and practices. All statements in this release, including forward-looking statements, speak only as of the date they are made, and Heartland undertakes no obligation to update any statement in light of new information or future events.

-FINANCIAL TABLES FOLLOW-

       
HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
For the Quarter Ended For the Nine Months Ended
September 30, September 30,
    2012   2011   2012   2011
Interest Income
Interest and fees on loans and leases $ 39,208 $ 37,393 $ 116,989 $ 111,839
Interest on securities:
Taxable 4,452 8,051 17,050 26,577
Nontaxable 2,896 2,145 7,786 5,695
Interest on federal funds sold - 2 1 3
Interest on deposits in other financial institutions   3     -       5     1  
Total Interest Income   46,559     47,591       141,831     144,115  
Interest Expense
Interest on deposits 5,504 7,028 16,883 22,729
Interest on short-term borrowings 215 205 652 689
Interest on other borrowings   4,028     4,123       12,114     12,140  
Total Interest Expense   9,747     11,356       29,649     35,558  
Net Interest Income 36,812 36,235 112,182 108,557
Provision for loan and lease losses   (502 )   7,727       4,852     21,581  
Net Interest Income After Provision for Loan and Lease Losses   37,314     28,508       107,330     86,976  
Noninterest Income
Service charges and fees 3,944 3,657 11,240 10,617
Loan servicing income 3,016 1,081 7,832 3,928
Trust fees 2,667 2,384 7,940 7,519
Brokerage and insurance commissions 908 918 2,757 2,622
Securities gains, net 5,212 2,085 14,106 8,930
Gain (loss) on trading account securities (163 ) (83 ) (117 ) 214
Impairment loss on securities - - (981 ) -
Gains on sale of loans 13,750 3,183 34,941 5,893
Valuation adjustment on mortgage servicing rights (493 ) - (674 ) -
Income on bank owned life insurance 382 208 1,131 942
Other noninterest income   543     (171 )     3,257     (126 )
Total Noninterest Income   29,766     13,262       81,432     40,539  
Noninterest Expense
Salaries and employee benefits 27,064 17,736 76,444 53,402
Occupancy 2,596 2,396 7,612 6,995
Furniture and equipment 1,541 1,392 4,504 4,161
Professional fees 4,217 3,110 10,938 9,182
FDIC insurance assessments 811 798 2,482 2,929
Advertising 1,183 1,191 3,558 3,154
Intangible assets amortization 146 141 399 431
Net loss on repossessed assets 3,775 1,409 7,986 5,552
Other noninterest expenses   5,826     3,690       14,835     11,287  
Total Noninterest Expense   47,159     31,863       128,758     97,093  
Income Before Income Taxes 19,921 9,907 60,004 30,422
Income taxes   6,338     2,549       19,642     8,631  
Net Income 13,583 7,358 40,362 21,791
Net (income) loss attributable to noncontrolling interest, net of tax   4     (20 )     23     5  
Net Income Attributable to Heartland 13,587 7,338 40,385 21,796
Preferred dividends and discount   (949 )   (3,947 )     (2,991 )   (6,619 )
Net Income Available to Common Stockholders $ 12,638   $ 3,391     $ 37,394   $ 15,177  
Earnings per common share-diluted $ 0.75 $ 0.20 $ 2.24 $ 0.92
Weighted average shares outstanding-diluted 16,745,968 16,585,021 16,729,637 16,569,376
 
HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
  For the Quarter Ended
    9/30/2012   6/30/2012   3/31/2012   12/31/2011   9/30/2011
Interest Income        
Interest and fees on loans and leases $ 39,208 $ 39,382 $ 38,399 $ 37,764 $ 37,393
Interest on securities:
Taxable 4,452 5,026 7,572 7,518 8,051
Nontaxable 2,896 2,619 2,271 2,340 2,145
Interest on federal funds sold - 1 - - 2
Interest on deposits in other financial institutions   3     2     -     -     -  
Total Interest Income   46,559     47,030     48,242     47,622     47,591  
Interest Expense
Interest on deposits 5,504 5,604 5,775 6,495 7,028
Interest on short-term borrowings 215 224 213 204 205
Interest on other borrowings   4,028     4,025     4,061     4,086     4,123  
Total Interest Expense 9,747 9,853 10,049 10,785 11,356
Net Interest Income 36,812 37,177 38,193 36,837 36,235
Provision for loan and lease losses   (502 )   3,000     2,354     7,784     7,727  
Net Interest Income After Provision for Loan and Lease Losses   37,314     34,177     35,839     29,053     28,508  
Noninterest Income
Service charges and fees 3,944 3,712 3,584 3,686 3,657
Loan servicing income 3,016 3,056 1,760 2,004 1,081
Trust fees 2,667 2,660 2,613 2,337 2,384
Brokerage and insurance commissions 908 939 910 889 918
Securities gains, net 5,212 4,951 3,943 4,174 2,085
Gain (loss) on trading account securities (163 ) 49 (3 ) (125 ) (83 )
Impairment loss on securities - - (981 ) - -
Gains on sale of loans 13,750 12,689 8,502 5,473 3,183
Valuation adjustment on mortgage servicing rights (493 ) (194 ) 13 (19 ) -
Income on bank owned life insurance 382 267 482 407 208
Other noninterest income   543     149     2,565     212     (171 )
Total Noninterest Income   29,766     28,278     23,388     19,038     13,262  
Noninterest Expense -
Salaries and employee benefits 27,064 25,384 23,996 22,135 17,736
Occupancy 2,596 2,534 2,482 2,368 2,396
Furniture and equipment 1,541 1,517 1,446 1,475 1,392
Professional fees 4,217 3,961 2,760 3,385 3,110
FDIC insurance assessments 811 807 864 848 798
Advertising 1,183 1,304 1,071 1,138 1,191
Intangible assets amortization 146 122 131 141 141
Net loss on repossessed assets 3,775 1,307 2,904 4,255 1,409
Other noninterest expenses   5,826     4,523     4,486     4,458     3,690  
Total Noninterest Expense   47,159     41,459     40,140     40,203     31,863  
Income Before Income Taxes 19,921 20,996 19,087 7,888 9,907
Income taxes   6,338     7,032     6,272     1,671     2,549  
Net Income 13,583 13,964 12,815 6,217 7,358
Net (income) loss attributable to noncontrolling interest, net of tax   4     (7 )   26     31     (20 )
Net Income Attributable to Heartland 13,587 13,957 12,841 6,248 7,338
Preferred dividends and discount   (949 )   (1,021 )   (1,021 )   (1,021 )   (3,947 )
Net Income Available to Common Stockholders $ 12,638   $ 12,936   $ 11,820   $ 5,227   $ 3,391  
Earnings per common share-diluted $ 0.75 $ 0.77 $ 0.71 $ 0.31 $ 0.20
Weighted average shares outstanding-diluted 16,745,968 16,717,846 16,729,925 16,599,741 16,585,021
 
HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
  As Of
    9/30/2012   6/30/2012   3/31/2012   12/31/2011   9/30/2011
Assets        
Cash and cash equivalents $ 191,126 $ 82,831 $ 150,122 $ 129,834 $ 81,605
Securities 1,332,082 1,331,088 1,221,909 1,326,592 1,323,464
Loans held for sale 99,429 73,284 103,460 53,528 36,529
Loans and leases:
Held to maturity 2,647,959 2,629,597 2,532,419 2,481,284 2,374,186
Loans covered by loss share agreements 8,511 9,567 11,360 13,347 14,766
Allowance for loan and lease losses   (40,401 )   (41,439 )   (39,362 )   (36,808 )   (44,195 )
Loans and leases, net 2,616,069 2,597,725 2,504,417 2,457,823 2,344,757
Premises, furniture and equipment, net 120,334 114,823 111,946 110,206 110,127
Goodwill 26,590 25,909 25,909 25,909 25,909
Other intangible assets, net 15,612 14,295 13,109 12,960 12,601
Cash surrender value on life insurance 72,853 72,448 72,159 67,084 66,654
Other real estate, net 36,139 37,941 38,934 44,387 39,188
FDIC indemnification asset 1,238 1,148 1,270 1,343 992
Other assets   81,725     76,192     69,616     75,392     70,853  
Total Assets $ 4,593,197   $ 4,427,684   $ 4,312,851   $ 4,305,058   $ 4,112,679  
Liabilities and Equity
Liabilities
Deposits:
Demand $ 877,790 $ 799,548 $ 771,421 $ 737,323 $ 692,893
Savings 1,809,776 1,734,155 1,731,399 1,678,154 1,654,417
Brokered time deposits 56,627 51,575 41,475 41,225 44,225
Other time deposits   758,843     749,629     731,464     753,411     782,079  
Total deposits 3,503,036 3,334,907 3,275,759 3,210,113 3,173,614
Short-term borrowings 245,308 249,485 229,533 270,081 173,199
Other borrowings 377,536 377,543 377,362 372,820 375,976
Accrued expenses and other liabilities   72,571     90,755     64,154     99,151     36,667  
Total Liabilities 4,198,451 4,052,690 3,946,808 3,952,165 3,759,456
Equity
Preferred equity 81,698 81,698 81,698 81,698 81,698
Common equity   310,396     290,640     281,696     268,520     268,819  
Total Heartland Stockholders' Equity 392,094 372,338 363,394 350,218 350,517
Noncontrolling interest   2,652     2,656     2,649     2,675     2,706  
Total Equity   394,746     374,994     366,043     352,893     353,223  
Total Liabilities and Equity $ 4,593,197   $ 4,427,684   $ 4,312,851   $ 4,305,058   $ 4,112,679  
Common Share Data
Book value per common share $ 18.81 $ 17.65 $ 17.09 $ 16.29 $ 16.33
ASC 320 effect on book value per common share $ 1.46 $ 0.98 $ 1.09 $ 0.97 $ 1.22
Common shares outstanding, net of treasury stock 16,505,241 16,467,889 16,486,539 16,484,790 16,459,338
Tangible Capital Ratio(1) 6.18 % 5.98 % 5.93 % 5.63 % 5.90 %
 

(1) Total common stockholders' equity less goodwill and intangible assets (excluding mortgage servicing rights) divided by total assets less intangible assets (excluding mortgage servicing rights). This is a non-GAAP financial measure.
         
HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA

For the Quarter Ended

For the Nine Months Ended
        9/30/2012   9/30/2011   9/30/2012   9/30/2011
Average Balances
Assets $ 4,532,302 $ 4,063,330 $ 4,370,919 $ 4,034,215
Loans and leases, net of unearned 2,727,806 2,399,047 2,660,556 2,398,561
Deposits 3,415,810 3,110,978 3,303,138 3,083,548
Earning assets 4,019,601 3,624,559 3,892,024 3,607,348
Interest bearing liabilities 3,235,440 3,002,868 3,152,584 3,009,841
Common stockholders' equity 299,408 270,696 286,479 261,296
Total stockholders' equity 383,763 353,003 370,837 343,048
Tangible common stockholders' equity 272,078 242,886 259,060 233,341
 
Earnings Performance Ratios
Annualized return on average assets 1.11 % 0.33 % 1.14 % 0.50 %
Annualized return on average common equity 16.79 % 4.97 % 17.44 % 7.77 %
Annualized return on average common tangible equity 18.48 % 5.54 % 19.28 % 8.70 %
Annualized net interest margin(1) 3.84 % 4.14 % 4.03 % 4.18 %
Efficiency ratio(2) 74.47 % 65.07 % 69.64 % 67.24 %
 
(1) Computed on a tax equivalent basis using an effective tax rate of 35%
(2) Noninterest expense divided by the sum of net interest income and noninterest income less net security gains. This is a non-GAAP financial measure.
 
HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
For the Quarter Ended
    9/30/2012   6/30/2012   3/31/2012   12/31/2011   9/30/2011
Average Balances
Assets $ 4,532,302 $ 4,350,916 $ 4,225,815 $ 4,197,916 $ 4,063,330
Loans and leases, net of unearned 2,727,806 2,675,694 2,577,429 2,487,778 2,399,047
Deposits 3,415,810 3,291,293 3,201,073 3,215,793 3,110,978
Earning assets 4,019,601 3,870,359 3,784,709 3,749,612 3,624,559
Interest bearing liabilities 3,235,440 3,140,063 3,081,340 3,066,704 3,002,868
Common stockholders' equity 299,408 284,610 275,275 267,025 270,696
Total stockholders' equity 383,763 368,960 359,644 351,538 353,003
Tangible common stockholders' equity 272,078 257,212 247,744 239,384 242,886
 
Earnings Performance Ratios
Annualized return on average assets 1.11 % 1.20 % 1.12 % 0.49 % 0.33 %
Annualized return on average common equity 16.79 % 18.28 % 17.27 % 7.77 % 4.97 %
Annualized return on average common tangible equity 18.48 % 20.23 % 19.19 % 8.66 % 5.54 %
Annualized net interest margin(1) 3.84 % 4.05 % 4.23 % 4.08 % 4.14 %
Efficiency ratio(2) 74.47 % 66.56 % 67.71 % 75.29 % 65.07 %
 

(1) Computed on a tax equivalent basis using an effective tax rate of 35%

(2) Noninterest expense divided by the sum of net interest income and noninterest income less net security gains. This is a non-GAAP financial measure.
 
HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA
  As of and for the Quarter Ended
    9/30/2012   6/30/2012   3/31/2012   12/31/2011   9/30/2011
Loan and Lease Data        
Loans held to maturity:
Commercial and commercial real estate $ 1,902,383 $ 1,903,996 $ 1,842,566 $ 1,809,450 $ 1,725,586
Residential mortgage 228,972 220,084 202,883 194,436 179,628
Agricultural and agricultural real estate 283,697 279,285 270,687 262,975 256,857
Consumer 236,619 230,594 222,387 220,099 217,007
Direct financing leases, net 205 290 323 450 604
Unearned discount and deferred loan fees   (3,917 )   (4,652 )   (6,427 )   (6,126 )   (5,496 )
Total loans and leases held to maturity $ 2,647,959   $ 2,629,597   $ 2,532,419   $ 2,481,284   $ 2,374,186  
Loans covered under loss share agreements:
Commercial and commercial real estate $ 3,772 $ 4,497 $ 5,730 $ 6,380 $ 6,788
Residential mortgage 3,099 3,309 3,734 4,158 4,410
Agricultural and agricultural real estate 863 858 934 1,659 2,139
Consumer   777     903     962     1,150     1,429  
Total loans and leases covered under loss share agreements $ 8,511   $ 9,567   $ 11,360   $ 13,347   $ 14,766  
Asset Quality
Not covered under loss share agreements:
Nonaccrual loans $ 40,743 $ 44,845 $ 49,940 $ 57,435 $ 72,629
Loans and leases past due ninety days or more as to interest or principal payments - - - - -
Other real estate owned 35,994 37,709 38,693 43,506 38,640
Other repossessed assets   496     465     710     648     398  
Total nonperforming assets not covered under loss share agreements $ 77,233   $ 83,019   $ 89,343   $ 101,589   $ 111,667  
Performing troubled debt restructured loans $ 22,385 $ 24,715 $ 21,379 $ 25,704 $ 24,853
Covered under loss share agreements:
Nonaccrual loans $ 2,236 $ 2,862 $ 3,189 $ 3,345 $ 3,886
Other real estate owned   145     232     241     881     548  
Total nonperforming assets covered under loss share agreements $ 2,381   $ 3,094   $ 3,430   $ 4,226   $ 4,434  
Allowance for Loan and Lease Losses
Balance, beginning of period $ 41,439 $ 39,362 $ 36,808 $ 44,195 $ 40,602
Provision for loan and lease losses (502 ) 3,000 2,354 7,784 7,727
Charge-offs on loans not covered by loss share agreements (2,785 ) (2,219 ) (1,608 ) (15,616 ) (5,985 )
Charge-offs on loans covered by loss share agreements (265 ) (35 ) - (5 ) (168 )
Recoveries   2,514     1,331     1,808     450     2,019  
Balance, end of period $ 40,401   $ 41,439   $ 39,362   $ 36,808   $ 44,195  
Asset Quality Ratios Excluding Assets Covered Under Loss Share Agreements
Ratio of nonperforming loans and leases to total loans and leases 1.54 % 1.71 % 1.97 % 2.31 % 3.06 %
Ratio of nonperforming assets to total assets 1.68 % 1.87 % 2.07 % 2.39 % 2.72 %
Annualized ratio of net loan charge-offs to average loans and leases 0.08 % 0.14 % (0.03 )% 2.42 % 0.66 %
Allowance for loan and lease losses as a percent of loans and leases 1.53 % 1.58 % 1.55 % 1.48 % 1.86 %
Allowance for loan and lease losses as a percent of nonperforming loans and leases 99.16 % 92.40 % 78.82 % 64.09 % 60.85 %
 
HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS
  For the Quarter Ended
September 30, 2012   September 30, 2011
Average     Average    
Balance Interest Rate Balance Interest Rate
Earning Assets
Securities:
Taxable $ 1,008,820 $ 4,452 1.76 % $ 1,060,502 $ 8,051 3.01 %
Nontaxable(1)   316,409     4,455 5.60 %   204,239     3,300 6.41 %
Total securities   1,325,229     8,907 2.67 %   1,264,741     11,351 3.56 %
Interest bearing deposits 6,631 3 0.18 % 1,896 2 0.42 %
Federal funds sold   220     - - %   217     - - %
Loans and leases:
Commercial and commercial real estate(1) 1,906,912 25,207 5.26 % 1,727,100 24,980 5.74 %
Residential mortgage 301,166 3,324 4.39 % 195,847 2,649 5.37 %
Agricultural and agricultural real estate(1) 285,018 3,940 5.50 % 257,934 3,821 5.88 %
Consumer 234,494 5,798 9.84 % 217,534 5,325 9.71 %
Direct financing leases, net 216 3 5.53 % 632 8 5.02 %
Fees on loans - 1,334 - % - 1,009 - %
Less: allowance for loan and lease losses   (40,285 )   - - %   (41,342 )   - - %
Net loans and leases   2,687,521     39,606 5.86 %   2,357,705     37,792 6.36 %
Total earning assets   4,019,601     48,516 4.80 %   3,624,559     49,145 5.38 %
Nonearning Assets   512,701     438,768  
Total Assets $ 4,532,302   $ 48,516 $ 4,063,327   $ 49,145
Interest Bearing Liabilities
Savings $ 1,745,324 $ 1,683 0.38 % $ 1,588,958 $ 2,165 0.54 %
Time, $100,000 and over 290,236 1,179 1.62 % 269,069 1,436 2.12 %
Other time deposits 533,177 2,642 1.97 % 585,589 3,427 2.32 %
Short-term borrowings 289,213 215 0.30 % 181,794 205 0.45 %
Other borrowings   377,490     4,028 4.24 %   377,458     4,123 4.33 %
Total interest bearing liabilities   3,235,440     9,747 1.20 %   3,002,868     11,356 1.50 %
Noninterest Bearing Liabilities
Noninterest bearing deposits 847,073 667,362
Accrued interest and other liabilities   66,026     40,094  
Total noninterest bearing liabilities   913,099     707,456  
Stockholders' Equity   383,763     353,003  
Total Liabilities and Stockholders' Equity $ 4,532,302   $ 4,063,327  
Net interest income(1) $ 38,769 $ 37,789
Net interest spread(1) 3.60 % 3.88 %
Net interest income to total earning assets(1) 3.84 % 4.14 %
Interest bearing liabilities to earning assets 80.49 % 82.85 %
 
(1) Computed on a tax equivalent basis using an effective tax rate of 35%
 
HEARTLAND FINANCIAL USA, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited)
DOLLARS IN THOUSANDS
  For the Nine Months Ended
September 30, 2012   September 30, 2011
Average     Average    
Balance Interest Rate Balance Interest Rate
Earning Assets
Securities:
Taxable $ 994,961 $ 17,050 2.29 % $ 1,068,776 $ 26,577 3.32 %
Nontaxable(1)   269,589     11,978 5.93 %   178,317     8,762 6.57 %
Total securities   1,264,550     29,028 3.07 %   1,247,093     35,339 3.79 %
Interest bearing deposits 5,684 5 0.12 % 3,559 3 0.11 %
Federal funds sold   599     1 0.22 %   551     1 0.24 %
Loans and leases:
Commercial and commercial real estate(1) 1,872,161 75,396 5.38 % 1,736,296 75,159 5.79 %
Residential mortgage 285,545 9,762 4.57 % 189,310 7,542 5.33 %
Agricultural and agricultural real estate(1) 276,145 11,802 5.71 % 256,284 11,720 6.11 %
Consumer 226,405 16,968 10.01 % 215,908 15,179 9.40 %
Direct financing leases, net 300 12 5.34 % 763 31 5.43 %
Fees on loans - 4,239 - % - 3,379 - %
Less: allowance for loan and lease losses   (39,365 )   - - %   (42,416 )   - - %
Net loans and leases   2,621,191     118,179 6.02 %   2,356,145     113,010 6.41 %
Total earning assets   3,892,024     147,213 5.05 %   3,607,348     148,353 5.50 %
Nonearning Assets   478,895     426,867  
Total Assets $ 4,370,919   $ 147,213 $ 4,034,215   $ 148,353
Interest Bearing Liabilities
Savings $ 1,717,213 $ 5,064 0.39 % $ 1,567,209 $ 7,118 0.61 %
Time, $100,000 and over 264,539 3,602 1.82 % 268,849 4,592 2.28 %
Other time deposits 528,839 8,217 2.08 % 602,574 11,019 2.44 %
Short-term borrowings 265,695 652 0.33 % 197,691 689 0.47 %
Other borrowings   376,298     12,114 4.30 %   373,518     12,140 4.35 %
Total interest bearing liabilities   3,152,584     29,649 1.26 %   3,009,841     35,558 1.58 %
Noninterest Bearing Liabilities
Noninterest bearing deposits 792,547 644,916
Accrued interest and other liabilities   54,951     36,410  
Total noninterest bearing liabilities   847,498     681,326  
Stockholders' Equity   370,837     343,048  
Total Liabilities and Stockholders' Equity $ 4,370,919   $ 4,034,215  
Net interest income(1) $ 117,564 $ 112,795
Net interest spread(1) 3.79 % 3.92 %
Net interest income to total earning assets(1) 4.03 % 4.18 %
Interest bearing liabilities to earning assets 81.00 % 83.44 %
 
(1) Computed on a tax equivalent basis using an effective tax rate of 35%
 
HEARTLAND FINANCIAL USA, INC.
SELECTED FINANCIAL DATA - SUBSIDIARY BANKS (Unaudited)
DOLLARS IN THOUSANDS
  As of and For the Quarter Ended
    9/30/2012   6/30/2012   3/31/2012   12/31/2011   9/30/2011
Total Assets        
Dubuque Bank and Trust Company $ 1,478,943 $ 1,385,409 $ 1,407,827 $ 1,382,226 $ 1,275,116
New Mexico Bank & Trust 973,177 998,172 929,804 993,182 921,973
Wisconsin Bank & Trust 511,580 497,372 491,741 524,958 486,319
Rocky Mountain Bank 435,283 443,493 432,902 440,805 425,132
Riverside Community Bank 424,044 360,654 343,232 325,388 316,945
Galena State Bank & Trust Co. 295,222 309,516 289,740 290,656 294,299
Arizona Bank & Trust 275,053 268,103 239,434 227,993 221,481
Minnesota Bank & Trust 109,586 101,704 95,462 81,457 75,021
Summit Bank & Trust     104,066       102,875       98,247       100,994       99,528  
Total Deposits
Dubuque Bank and Trust Company $ 1,089,125 $ 959,273 $ 978,854 $ 938,000 $ 929,854
New Mexico Bank & Trust 720,520 725,537 697,060 690,293 681,413
Wisconsin Bank & Trust 424,146 415,277 409,994 429,062 402,957
Rocky Mountain Bank 354,396 356,046 362,307 365,373 356,353
Riverside Community Bank 335,899 305,120 286,529 264,699 268,432
Galena State Bank & Trust Co. 247,334 257,800 245,780 243,639 255,006
Arizona Bank & Trust 216,851 211,318 183,321 177,457 179,369
Minnesota Bank & Trust 91,179 77,119 78,338 66,875 57,058
Summit Bank & Trust     88,540       83,977       81,290       81,224       85,431  
Net Income (Loss)
Dubuque Bank and Trust Company $ 5,485 $ 8,463 $ 9,604 $ 4,846 $ 5,602
New Mexico Bank & Trust 4,395 1,592 2,216 2,197 1,509
Wisconsin Bank & Trust 1,943 1,547 2,153 2,313 2,443
Rocky Mountain Bank 1,315 2,089 963 493 780
Riverside Community Bank 607 914 369 800 (339 )
Galena State Bank & Trust Co. 938 1,149 437 1,139 941
Arizona Bank & Trust 1,534 981 (215 ) (1,202 ) (960 )
Minnesota Bank & Trust (15 ) 35 (129 ) (157 ) 102
Summit Bank & Trust     (1 )     (100 )     (123 )     (154 )     (160 )
Return on Average Assets
Dubuque Bank and Trust Company 1.50 % 2.39 % 2.88 % 1.44 % 1.74 %
New Mexico Bank & Trust 1.78 0.66 0.96 0.93 0.65
Wisconsin Bank & Trust 1.53 1.27 1.69 1.83 2.05
Rocky Mountain Bank 1.21 1.94 0.89 0.45 0.73
Riverside Community Bank 0.57 1.05 0.45 0.98 (0.42 )
Galena State Bank & Trust Co. 1.24 1.58 0.62 1.54 1.28
Arizona Bank & Trust 2.22 1.56 (0.37 ) (2.13 ) (1.72 )
Minnesota Bank & Trust (0.06 ) 0.15 (0.58 ) (0.77 ) 0.56
Summit Bank & Trust     -       (0.40 )     (0.50 )     (0.63 )     (0.66 )
Net Interest Margin as a Percentage of Average Earning Assets
Dubuque Bank and Trust Company 3.61 % 3.67 % 4.03 % 4.00 % 4.01 %
New Mexico Bank & Trust 3.50 3.69 4.02 3.85 4.10
Wisconsin Bank & Trust 4.04 4.38 4.41 4.30 4.33
Rocky Mountain Bank 4.35 4.68 4.33 4.06 4.03
Riverside Community Bank 2.44 3.38 3.63 3.64 3.58
Galena State Bank & Trust Co. 3.50 3.42 3.89 3.69 3.55
Arizona Bank & Trust 3.76 4.19 4.40 4.06 4.10
Minnesota Bank & Trust 4.47 4.57 4.75 4.56 4.82
Summit Bank & Trust 3.75 3.89 4.07 3.41 3.84
 
HEARTLAND FINANCIAL USA, INC.
SELECTED FINANCIAL DATA - SUBSIDIARY BANKS (Unaudited)
DOLLARS IN THOUSANDS
As of
  9/30/2012   6/30/2012   3/31/2012   12/31/2011   9/30/2011
Total Portfolio Loans and Leases        
Dubuque Bank and Trust Company $ 827,065 $ 824,830 $ 796,789 $ 778,467 $ 731,356
New Mexico Bank & Trust 490,102 500,296 506,424 508,874 507,416
Wisconsin Bank & Trust 355,670 353,152 340,841 333,112 318,906
Rocky Mountain Bank 286,138 280,137 264,964 256,704 250,728
Riverside Community Bank 155,191 158,186 153,174 155,320 155,995
Galena State Bank & Trust Co. 172,530 169,160 167,677 157,398 143,680
Arizona Bank & Trust 185,186 177,953 150,629 146,346 137,356
Minnesota Bank & Trust 85,860 80,815 73,413 58,058 50,545
Summit Bank & Trust   67,909       67,932       63,658       62,422       53,402  
Allowance For Loan and Lease Losses
Dubuque Bank and Trust Company $ 9,760 $ 9,454 $ 9,584 $ 9,365 $ 10,087
New Mexico Bank & Trust 7,834 8,705 7,110 6,633 10,271
Wisconsin Bank & Trust 3,719 3,695 3,629 3,458 3,288
Rocky Mountain Bank 4,135 4,325 4,204 3,865 3,953
Riverside Community Bank 3,122 3,114 3,206 2,834 4,770
Galena State Bank & Trust Co. 1,932 1,808 1,854 1,835 1,956
Arizona Bank & Trust 4,723 5,390 5,315 4,627 5,590
Minnesota Bank & Trust 915 822 748 588 507
Summit Bank & Trust   1,478       1,370       1,132       1,012       1,108  
Nonperforming Loans and Leases
Dubuque Bank and Trust Company $ 2,378 $ 2,508 $ 3,107 $ 3,634 $ 4,298
New Mexico Bank & Trust 8,455 10,856 13,368 15,161 15,404
Wisconsin Bank & Trust 6,673 7,463 7,482 8,074 11,871
Rocky Mountain Bank 6,167 6,005 7,787 8,662 14,180
Riverside Community Bank 4,685 5,222 5,458 6,729 5,870
Galena State Bank & Trust Co. 3,242 3,778 3,699 3,853 5,309
Arizona Bank & Trust 5,409 5,645 5,755 7,927 10,811
Minnesota Bank & Trust 5 6 6 6 6
Summit Bank & Trust   2,913       2,691       2,709       2,848       4,159  
Allowance As a Percent of Total Loans and Leases
Dubuque Bank and Trust Company 1.18 % 1.15 % 1.20 % 1.20 % 1.38 %
New Mexico Bank & Trust 1.60 1.74 1.40 1.30 2.02
Wisconsin Bank & Trust 1.05 1.05 1.06 1.04 1.03
Rocky Mountain Bank 1.45 1.54 1.59 1.51 1.58
Riverside Community Bank 2.01 1.67 2.09 1.82 3.06
Galena State Bank & Trust Co. 1.12 1.07 1.11 1.17 1.36
Arizona Bank & Trust 2.55 3.03 3.53 3.16 4.07
Minnesota Bank & Trust 1.07 1.02 1.02 1.01 1.00
Summit Bank & Trust 2.18 2.02 1.78 1.62 2.07

Copyright Business Wire 2010

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